International Journal of Physical Distribution & Logistics Management

Postponement: an evolving supply chain concept

Christopher A. Boone Christopher W. Craighead Joe B. Hanna
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IJPDLM
37,8 Postponement: an evolving
supply chain concept
Christopher A. Boone, Christopher W. Craighead and
594 Joe B. Hanna
Auburn University, Auburn, Alabama, USA
Received January 2006
Revised July 2007
Accepted July 2007 Abstract
Purpose The purpose of this paper is to assess and document the progress of postponement
research, identify current gaps, and provide direction for future research efforts.
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Design/methodology/approach Postponement literature published from 1999 to 2006 was

reviewed.
Findings The review revealed a significant increase in the number of postponement research
efforts, many of which at least partially addressed past challenges noted in previous research. Several
opportunities to continue addressing these past challenges were identified. Future researchers are
challenged to validate new postponement concepts and extend postponement research beyond its
manufacturing context. Other challenges call for the continued assessment of the relationship between
postponement and uncertainty and the investigation into the slow rate of postponement adoption
among practitioners.
Research limitations/implications This effort is not an exhaustive review of all postponement
research. This review does not consider unpublished papers, papers in non-academic journals, or
papers presented at conferences.
Practical implications This review is a useful resource for supply chain researchers interested in
supply chain strategies and the evolution of postponement as a supply chain concept.
Originality/value This paper uses the challenges of past research as a measure of the progress of
postponement thought and theory. The gaps identified and challenges made will serve as a foundation
upon which future researchers can build.
Keywords Supply chain management, Uncertainty management, Corporate strategy
Paper type Literature review

International Journal of Physical
Distribution & Logistics Management
Vol. 37 No. 8, 2007
pp. 594-611
q Emerald Group Publishing Limited
0960-0035
DOI 10.1108/09600030710825676
Introduction
Supply chain management strategies and techniques are as varied as the disciplines
from which they originate and the customers they are to serve. Though varied in
method, the intent of many of these strategies is consistent: reduce uncertainty and cost
while satisfying customer needs. The focus of this research effort, postponement, is an
attempt to do both. Simply stated, postponement refers to a concept whereby activities
in the supply chain are delayed until a demand is realized (Bucklin, 1965; Van Hoek,
2001). Researchers suggest that postponement has the potential to improve
responsiveness while reducing inventory, transportation, storage, and obsolescence
costs (Yang et al., 2004a).
Postponements potential to create such significant supply chain improvement has
not gone unnoticed by practitioners. Postponement has a long history of practical
business application dating back to the 1920s (CLM, 1995). Often, referenced examples
of postponement include Benetton, Whirlpool, and Hewlett Packard. Benetton used
postponement to improve its responsiveness to customer demands. By postponing the
 dyeing of its garments, Benetton is better positioned to respond to demands for popular Progress of
colored clothing and reduce excess inventory of less-popular colors (Dapiran, 1992). postponement
Postponing the shipment of appliances to Sears until a customer order is received,
allowed Whirlpool to realize a significant reduction in inventory and transportation research
costs (Waller et al., 2000). Hewlett Packard postponed final assembly of its DeskJet
printers until the very late stages of the supply chain. This postponement of final
assembly, combined with the shift of assembly locations closer to customers, resulted 595
in a more cost-efficient production process while reducing transportation and logistics
costs (Feitzinger and Lee, 1997).
Postponement has an equally extensive history in academic literature.
Postponement literature dates back to 1950 when Alderson argued that overall costs
could be reduced by postponing a differentiating stage of production (Alderson, 1950).
Bucklin (1965) extended the concept of postponement by viewing it as an opportunity
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to shift the risk of owning goods from one position in a supply chain to another.
Postponement was later described as consisting of five specific types: labeling,
packaging, assembly, manufacturing, and time (Zinn and Bowersox, 1988). This
perception of postponement continues, in part, to this day.
In 2001, Van Hoek presented a review of postponement literature published prior to
1999. In this review, Van Hoek (2001) identified gaps in the existing literature and
issued five challenges for future postponement researchers:
(1) postponement as a supply chain concept;
(2) integrating related supply chain concepts;
(3) postponement in the globalizing supply chain;
(4) postponement in the customized supply chain; and
(5) methodological upgrading of postponement.

The goal of these five challenges was to re-conceptualize postponement, capture its
dynamics, and improve the methodological robustness of the concept. Since, Van
Hoeks review, the amount of postponement literature has grown significantly.
Reasons for the increased interest in postponement vary. Postponement has
surfaced in a variety of ways including time and form postponement. While many
researchers have focused solely or primarily on either time or form postponement,
recent researchers (Rabinovich and Evers, 2003; Tibben-Lembke and Bassok, 2005)
have developed models illustrating the potential performance enhancements that can
be gained by implementing a hybrid approach using multiple types of postponement or
postponement in conjunction with other production enhancements.
Growth in postponement is partially reflective of the increased demand for
customized products. In order to enhance product offerings, many organizations are
altering their supply chains to accommodate mass customization processes (Su et al.,
2005). The newly created supply chain structures often involve time postponement or
delaying product differentiation points until customer orders have actually been
received.
The desire to control inventory risks and logistics costs has also led to the adoption
of other types of postponement techniques by organizations (Chiou et al., 2002). For
example, many organizations are now utilizing form postponement to delay
differentiation in the manufacturing process, hoping to reduce inventory
 IJPDLM obsolescence and other logistics costs (Rabinovich and Evers, 2003). Still other
37,8 researchers suggest the growth is related to increasing interest in agility and
e-business (Yang et al., 2004b). The increased interest in postponement is most likely a
combination of many factors including response to growth in competition, more
sophisticated consumers, growing product varieties, and shortening product life cycles
(Bowersox et al., 1999).
596 This growth provided the impetus for this research effort. We reviewed
postponement research and assessed the progression of postponement thought and
theory by seeking to determine how recent literature addresses Van Hoeks five
challenges as well as identifying new needs. In short, the purpose of this paper is to
document the progress of postponement research, identify current gaps, and provide
direction for future research efforts.
The remainder of this paper is organized as follows. First, we present each of Van
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Hoeks (2001) challenges. Second, we use postponement literature published from 1999
to 2006 to assess and document the progress towards achieving each of the challenges.
Finally, we pose five new challenges for future postponement researchers.

Research approach
An effective review creates a firm foundation for advancing knowledge, facilitates
theory development, closes areas where a plethora of research exists, and uncovers
areas where research is needed (Webster and Watson, 2002). Thus, to document the
progress of postponement research, identify current gaps, and provide direction for
future research efforts, we reviewed literature published since Van Hoeks (2001)
rediscovery article. We utilized multiple electronic databases to identify relevant
research efforts. Since, major contributions are likely to be published in referred
journals (Webster and Watson, 2002), we limited our search to scholarly journal
articles whose primary focus was postponement. We also limited our search to
research published from 1999 to 2006. The beginning date for the review was selected
to insure inclusion of postponement related research published during the lag time
between the conclusion of Van Hoeks review in 1998 and its publication in 2001. This
review does not consider unpublished papers, papers in non-academic journals, or
papers presented at conferences.

Challenges
Table I provides an overview of the progress towards Van Hoeks challenges as well as
future extensions of these efforts that may be pursued.

Challenge 1: postponement as a supply chain concept

Van Hoeks review ended with literature published in 1998. At that time, he noted that
postponement research did not reflect an integrated view of postponement applications
throughout the supply chain. Little, Van Hoek suggested, had been done to extend the
concept of postponement beyond the work of Zinn and Bowersox (1988).
As mentioned above, postponement oftentimes results from organizations adopting
a mass customization strategy in order to enhance their ability to meet customer
demands. However, postponement and mass customization are distinctly different and
the terms should not be used interchangeably. Building upon Van Hoeks (2001)
review, he defined postponement as the delaying of supply chain activities until

Challenge
Postponement as a supply chain
concept
Integrating related supply chain
concepts
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Progress of
Assessment of progress/future direction(s)
postponement
There has been significant progress towards meeting the research
challenge to expand the postponement concept to greater
portions of the supply chain. The concept of postponement
now extends from product design to beyond the point at which
the end-user obtains the product. Future research should fully 597
explore these new postponement strategies and how they may
be utilized in combination
Postponement research has made some connections to
outsourcing and the use of 3PL providers. Future research
should attempt to establish connections to other supply chain
strategies and initiatives such as VMI, ECR, quick response,
and lean

Postponement in the globalizing
supply chain
Postponement in the customized
supply chain
Methodological upgrading of
postponement
Research has explored the use of postponement in more
countries, however, studies that include multiple countries are
lacking. Future research should address this need by designing
and implementing postponement studies that transcend
national and cultural borders
Several typologies related to postponement in the supply chain
have been proposed in the literature. Some of these extend
beyond the manufacturing context. Future research should
continue in this direction towards other aspects of the supply
chain such as upstream activities
There has been a methodological shift in the research to
more quantitative methods. Although we found no multiple
method studies, we believe that methodological diversity is an Table I.
encouraging sign. In addition to multiple methods, we believe Overview of original
that future efforts should utilize more experimental methods challenges

customer orders are received. By not restricting postponement to production or

logistics, this definition provides a significant extension from previous definitions. As
shown in Table II, additional expanded descriptions of postponement have followed in
recent literature. Each contributes to a broader definition and understanding of
postponement and presents opportunities for extending postponement to a wider
portion of the supply chain.
Van Mieghem and Dada (1999) present the concept of price postponement and
compare it to the more commonly studied concept of production postponement. Price
postponement requires the deferral of the pricing decision until demand uncertainty is
resolved. For example, a traditional automobile dealer must decide how many cars to
buy and hold on its lot before market demand is known and then must negotiate a price
with each customer (Van Mieghem and Dada, 1999). This extension of postponement
thought is significant in that it suggests opportunities for postponement downstream
from the production and logistics portions of the supply chain.
Waller et al. (2000) continued to expand the concept of postponement by describing
three additional stages in the supply chain that hold opportunities for the application of
postponement: upstream, downstream, and distribution. Of the three, upstream
postponement is the most significant departure from past-postponement discussions.
Extending the concept of postponement to upstream portions of the supply chain provides
opportunities for the delaying of raw material orders until customer orders are received.
 IJPDLM
References Description of postponement
37,8
Van Mieghem and Dada (1999) Compares price postponement (when a firm sets prices after
uncertainty resolution) with production postponement (where a
firm makes the production quantity decision after uncertainty
resolution)
598 Waller et al. (2000) Expands concept of postponement to include upstream
postponement, production postponement and downstream
postponement
Brown et al. (2000) Describes product postponement in which some of the
functionalities of products are specified in the field, even after
delivery to the customer
Van Hoek (2001) Defines postponement as the delaying of supply chain activities
until customer orders are received with the intention of
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customizing products as opposed to performing these activities in

Table II. anticipation of future orders
Postponement Aviv and Federgruen (2001b) Expands the concept of design for postponement where products
descriptions and processes are designed/redesigned to facilitate postponement

While downstream and distribution postponements provide further refinements of

postponement opportunities that exist in the later stages of the supply chain.
Yang et al. (2004a) further extended and refined the concept of postponement to include
product development postponement, purchasing postponement, production
postponement, and logistics postponement. Production postponement and
logistics postponement are similar to previously discussed concepts of postponement.
Purchasing postponement relates to Bucklins (1965) concept of shifting risk by delaying
the purchase of raw materials up to the point of production. However, product
development postponement extends the idea of postponement to the earliest stages of the
supply chain. Product development postponement provides an opportunity to reduce
design lead times and costly redesigns. By initially focusing on product specification
decisions that are likely to remain stable, design decisions about less stable portions of the
product can be postponed until better information is available (Yang et al., 2004a). For
example, Toyota engineers and managers delay certain decisions and give suppliers
partial information, while exploring numerous prototypes (Ward et al., 1995).
If product development postponement represents the earliest stages of the supply
chain, then product postponement is the latest. In product postponement, products are
designed so that specific functionality is not set until the customer or end-user receives
it (Brown et al., 2000). Under this concept of postponement, customers themselves
provide the final customization of the product.
Our assessment of the progress towards meeting the first challenge reveals that
researchers are responding to the challenge of expanding the postponement concept to
greater portions of the supply chain. The concept of postponement now extends from
product design to beyond the point at which the end-user obtains the product. What
was once only a strategy for differentiating a product has matured into a concept
capable of reconfiguring the entire supply chain (Yang and Burns, 2003). Future
researchers should now fully explore the applications and implications of these new
postponement strategies. Of particular interest would be research that sought
integration of multiple postponement strategies.
 Challenge 2: integrating related supply chain concepts Progress of
Van Hoeks second challenge called for the integration of postponement with related postponement
supply chain concepts. He argued that to widen the scope of postponement to cover the
entire supply chain would require a cross-fertilization with related concepts such as research
just-in-time manufacturing and supply, vendor-managed inventory (VMI), efficient
consumer response (ECR) and outsourcing to third-party logistics (3PL) providers
(Van Hoek, 2001). 599
Few research efforts linking postponement with the related concepts suggested by
Van Hoek (2001) were identified during this review. What was revealed during the
review is that much of the postponement research remains limited to production
postponement-related issues such as product customization and modularization (Ernst
and Kamrad, 2000; Partanen and Haapasalo, 2004; Skipworth and Harrison, 2004;
Yang et al., 2004a). This discussion of the postponement and customization
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relationship was somewhat expected because, though the concepts are distinguishable,
they are frequently related decisions. Some even suggest that customization can be
done only if there is some form of postponement either in the assembly state, assembly
area, supplier delivery, or in the design phase (Prasad et al., 2005). However, this
relationship is well documented and does not represent an extension or integration of
postponement with other supply chain concepts.
Identified here is the literature addressing the integration of postponement with
other concepts. We targeted research that contributes to the theory of postponement as
a concept capable of influencing the entire supply chain. To date, much of this research
appears to have been restricted to the relationship between postponement and
outsourcing to 3PL providers.
Outsourcing refers to the strategy in which organizations employ the services of an
external provider (Bolumole, 2001). Historically, outsourcing was limited to selecting
the cheapest alternative that met service requirements. However, todays relationships
are more strategic and often tailored to specific services such as packaging, quality
control, and information services (Skjoett-Larsen, 1999).
This change in the nature of the relationships has resulted in a trend towards the
use of third party providers for some postponement related activities (Twede et al.,
2000) and a growth in postponement services provided by third-party providers
(Van Hoek, 2000). Yang and Burns (2003) discuss much of the research relating
postponement and outsourcing. Citing real-world examples from Gillette (Gander and
Whitworth, 2000), Barilla (Battezzati and Magnani, 2000) and Hewlett Packard (Twede
et al., 2000), they suggest that the implementation of postponement facilitates
outsourcing to third parties.
Other researchers have focused directly on the relationships between fundamental
concepts such as transportation and inventory management. For example,
transportation, and its related environmental issues, is identified as a key
consideration when implementing a postponement strategy (Yang et al., 2005b). The
relationship between postponement and inventory performance (Rabinovich and
Evers, 2003) and location (Bailey and Rabinovich, 2005) has also been investigated.
The identified research linking postponement to supply chain-related concepts is
evidence of progress toward meeting the second challenge. However, there remain
insufficient studies to sufficiently investigate the link between postponement and other
supply chain strategies (Yang et al., 2004b). This gap offers future researchers many
 IJPDLM opportunities to contribute to the conceptual richness of postponement through its
37,8 continued cross-fertilization with other supply chain strategies such as VMI, ECR,
quick response, and lean.

Challenge 3: relating postponement to the globalization of supply chains

With his third challenge, Van Hoek cited the need for a global perspective of
600 postponement. He called for future researchers to compare applications of
postponement and to assess differences in drivers and inhibitors of postponement
across countries and continents (Van Hoek, 2001).
Postponement applications have grown as international firms increasingly
customize products for local markets (Bhatnagar and Viswanathan, 2000; Twede
et al., 2000). Recent literature included a number of articles drawing insights from
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samples of European companies. Van Hoek and Dierdoncks (2000) survey of 782
Dutch companies revealed postponement as a significant economic concept in The
Netherlands. Using cases involving four different companies, Van Hoek et al. (1999)
found that both strategic and operating characteristics influence the feasibility of
postponement in restructuring European supply chains. Similarly, Battezzati and
Magnani (2000) identified a largely under-exploited opportunity for the use of
postponement in the Italian fast moving consumer good market. Furthermore, the case
by Ghemawat and Nueno (2006) provides an example of how an apparel firm in Spain
utilizes postponement.
Other research targeted postponement in Asian countries. Chiou et al.s (2002)
survey of 102 firms found that postponement strategies are practiced widely by
information technology firms in Taiwan. Additionally, Huang and Los (2003)
investigation of Taiwans two largest personal computer producers highlighted the
need for postponed manufacturing to support its global supply chain structure.
Wanke and Zinn (2004) explored postponement and related issues in South
America. They performed a multiple industry investigation of firms in Brazil and
found that the strategies should vary by operational, product and demand factors.
Again, our review revealed that postponement research has extended to include an
international perspective. However, the challenge of developing a global perspective of
postponement continues. For example, research that directly compares the application of
postponement in different countries is still noticeably absent. Identification of key enablers
and inhibitors of postponement across countries and continents is also still needed.

Challenge 4: postponement in the customized supply chain

Van Hoek (2001) suggested that future research should lead to a typology of postponement
applications in the customized supply chain. He challenged researchers to develop
typologies using operating circumstances that influence feasibility and validity of
postponement and extend postponement beyond the manufacturing context.
One of the earliest such typologies was developed by Pagh and Cooper (1998).
Though included in Van Hoeks review, it is an example of how the concept of
postponement can be extended through the development of typologies and
frameworks. Pagh and Cooper (1998) combined the concepts of manufacturing and
logistics postponement and speculation to create the four distinct strategies of full
speculation, logistics, manufacturing, and full postponement.
 Our review identified two similar efforts to create postponement-related typologies. Progress of
One of the first was proposed by Ernst and Kamrad (2000). Ernst and Kamrad (2000) postponement
simplify the logistics flow into manufacturing (M), assembly (A), and packaging (P).
Using this simplified flow, they are able to relate the levels of outbound postponement research
and inbound modularization. Building on these relationships, Ernst and Kamrad (2000)
identify four supply chain structures: rigid, flexible, postponed, and modularized.
Insinuated by these varied structures are differing degrees of postponement. 601
Yang et al. (2004a) provide a related typology. Only, instead of relating
modularization and postponement, they suggest a variety of postponement strategies
depending on the levels of uncertainty and modularization. Four types of postponement
are presented: purchasing, product development, logistics, and production. Yang et al.
(2004a) suggest that the type of postponement is dictated by the degree and type of
modularity in the production cycle and the degree of uncertainty related to the product
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and its supply chain. This topology is especially useful in that it reinforces the idea of
using postponement to combat uncertainty throughout the supply chain.
From our review, it appears that researchers have begun to address Van Hoeks
challenge to develop postponement typologies. By expanding postponement thought to
include varied supply chain structures, degrees of uncertainty, and levels of
modularization, Ernst and Kamrad (2000), and Yang et al. (2004a) have responded to
Van Hoeks challenge to develop typologies using operating circumstances impacting
feasibility and validity of postponement. However, opportunities still exist for the
development of additional typologies and for the development of typologies that
extend postponement beyond the manufacturing context such as upstream
postponement (Waller et al., 2000).

Challenge 5: methodological upgrading of postponement

Van Hoeks (2001) fifth and final challenge called for methodological upgrading of
postponement. In this challenge, he calls for the study of postponement through
multi-method research efforts. More specifically, he calls for the use of triangulation as
it leads to robust results and provides opportunities for cross-method synergies (Jick,
1979) and is said to be the best method for studying logistics (Mentzer and Flint, 1997).
We assessed the progress of postponement research by first identifying the research
methodology applied in the 46 articles analyzed during our review. We categorized
each article into one of five categories. For consistency, we used the four categories
utilized by Van Hoek (2001) (theoretical/conceptual, cases, simulation/calculation
model, and survey) and added a category for multi-method studies. Table III contains

1965-1998 1999-2006
Research method Number Percentage Number Percentage

Theoretical/conceptual 7 33 9 20
Cases 6 29 10 22
Simulation or calculation model 4 19 19 41
Multi-method 0 0 0 0 Table III.
Survey, interview, or questionnaire 4 19 8 17 Methodological
Total articles 21 46 categorization
 IJPDLM the results from Van Hoeks review and the findings from our categorization of the
37,8 46 articles.
The most significant change, in terms of research methodologies applied, is the
increase in the number of simulation and mathematical-based research efforts.
The proportion of theoretical/conceptual, cases, and surveys all decreased, whereas the
proportion of simulation or calculation model more than doubled (from 19 to 41 percent).
602 We found little evidence of progress towards utilizing multi-method research efforts
called for by Van Hoek. However, we believe that the relative shift of methods is an
encouraging sign for the postponement body of knowledge. Specifically, we believe
that the shift to simulation and mathematical modeling is a sign of maturing
literature as these methods tend to be more appropriate for more detailed analysis.
Although the shift in methods is perhaps a good sign, there are still areas of need
within the postponement research.
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Our review provides an opportunity to assess the general strengths and weaknesses
of current postponement research. As McGrath (1981) suggests, it is not possible to
conduct an unflawed study:
It is always desirable to maximize: (A) generalizability with respect to populations; (B)
precision in control and measurement of variables related to the behavior(s) of interest; and
(C) existential realism, for the participants, of the context within which those behaviors are
observed. But, alas, ceteris is never parabus, in the world of research . . . The very choices and
operations by which one can seek to maximize any one of these will reduce the other two.
McGrath (1981) describes this as a three-horned dilemma.
The flawed research methodologies limit the conclusions that can be drawn (Scandura
and Williams, 2000). Figure 1 shows the strengths and weaknesses of different
research methodologies by grouping-related methodologies into quadrants. The
postponement research identified during this review fell into all but one of these
quadrants. This was expected as Quadrant II includes more scientific and
laboratory-based research methodologies.
Quadrant I contains both field studies and field experiments. These research
methodologies, like the case-based research efforts identified during our review, occur

Obtrusive I. Settings in natural systems

B
Research
Operations II. Contrived and created settings
Laboratory Experimental
Experiments Simulations III. Behavior not setting dependent

IV. No observations of behavior required

Judgment Field
II II Experiments
Tasks III I A. Point of maximum concern with generality
Sample III I Field over actors
Surveys Studies Point of maximum concern with precision
IV IV C
B.
of measurement behavior
Formal Computer
Theory Simulations C. Point of maximum concern with system
A
character of context
Unobtrusive
Research
Figure 1. Operations
McGrath research strategy Universal Particular
Behavior Systems Behavior Systems
model
Source: McGrath(1981)
 in settings that are real and focus on maximizing realism. In general, the cases found Progress of
in the literature would be classified as field studies rather than field experiments. postponement
Quadrant III includes the survey and judgment-based studies identified during the
review. These types of efforts allow for the maximization of generalizability. Finally, research
Quadrant IV includes conceptual research efforts that use computer simulation or
develop formal theory. Postponement research using mathematical modeling and
simulation fall into this category. 603
We agree with Van Hoek (2001) that triangulation is needed, but we also believe that
there is a need for more methodological diversity as differing methods could attack
different types of research questions. We believe that there is particular need to utilize
more experimental types of methods whether they are experimental simulations or
field experiments as these methods are largely lacking in the literature. In sum,
although triangulation was not found, we believe that progress has been made.
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However, we believe that more efforts are needed to fully meet this challenge.

New challenges
Thus, far, we have restated Van Hoeks five challenges and reviewed the current
progress towards meeting these challenges. As highlighted above, we identified
varying degrees of progress on the challenges. We also identified opportunities for
researchers to continue the progress in these five areas.
In addition to Van Hoeks challenges, we propose additional challenges that we feel,
if addressed, could significantly enhance the postponement body of knowledge. We
derived these insights from our review of the recent research extensions and
expansions of the postponement concept, and the original literature that Van Hoek
analyzed. Based on this extensive review of the literature (past and present), we
propose five new challenges.

New challenge 1: assess application of postponement relative to performance

Postponement is often seen as a valuable tool to be used to enhance supply chain
functionality and enhance efficiency. Various types of postponement have been altered
as managers have applied the concept to their specific and unique supply chains. While
several variations are now appearing, many of these newer variations of postponement
need further development and explanation prior to being validated as tools to enhance
supply chain performance. For example, future research related to the application of
concepts such as price postponement and product design postponement would shed
new light on their use and benefits. Research, similar to that of Rabinovich and Evers
(2003) and Aviv and Federgruen (2001a), that investigates the interactions and
trade-offs between different types of postponement strategies within a supply chain is
needed.
Additionally, Yang et al. (2004b) provide an integrated framework which details
many of the unexplored issues of postponement application. Postponement is shown as
a comprehensive strategy, capable of driving changes in the structure of the supply
chain. This framework should guide and motivate both academics and practitioners in
their continued study of postponement application (Yang et al., 2004b).
Finally, the research would significantly benefit from studies that analyzed
postponement and performance over time. This would be particularly beneficial as
products transition through the various stages of their life cycle.
 IJPDLM New challenge 2: selecting appropriate postponement points
37,8 Bucklin (1965) pointed out that activities cannot be postponed forever. We can extend
this statement by suggesting that postponement cannot occur everywhere. As we
expand the postponement concept to the entire supply chain, we must now consider at
what point or combination of points in the supply chain postponement provides the
greatest overall benefit. Though possible, it may not be practical or optimal to
604 postpone activities at multiple points within the supply chain. So, where in the supply
chain should we postpone?
Previous efforts (Zinn and Levy, 1988) attempted to approach this question, but
postponement techniques appear to be evolving and adapted to new environments. As
a result, past-postponement research was unable to apply a truly integrated approach
examining all of the variations of postponement now present in modern supply chain
systems. Furthermore, many past efforts were limited in that they only considered the
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downstream portion of the supply chain (Pagh and Cooper, 1998), the interaction
between modularization and postponement (Ernst and Kamrad, 2000), or the degree of
customization (Lampel and Mintzberg, 1996). Our broader view of postponement
requires a complete supply chain view (Yang and Burns, 2003).

New challenge 3: postponement in the service industry

Though not stated as a separate challenge, Van Hoek (2001) did suggest the study of
postponement outside the manufacturing context, specifically mentioning service
related industries. Given the enhanced prominence of 3PL service providers and their
impact on many supply chain operations, examining service-based postponement
opportunities is a valuable undertaking. Van Hoek characterizes a service industry as
one in which consumption and production partially coincide and in which
postponement strategies may be applicable. Although Bhatnagar and Viswanathan
(2000) elude to alliances between manufacturers and global logistics service providers,
we did not identify any research efforts specifically exploring service-oriented
industries and the implementation of specific postponement opportunities and their
performance results. Future research should investigate postponement in service
chains as well as product-based chains. For examples, future research could investigate
the use of postponement in service chains such as those found in healthcare, travel and
financial advising industries.

New challenge 4: further develop postponement as a response to uncertainty

Recently uncertainty rules the supply chain (Geary et al., 2002). Selected supply chain
strategies must then be robust enough to address uncertainty. Postponement would
seem to be a natural strategic response to uncertainty as it delays supply chain
activities until the latest possible moment (Yang and Burns, 2003).
However, our review revealed only one effort specifically linking postponement
strategies to uncertainty. As discussed previously, Yang et al. (2004a) suggest a variety
of postponement strategies depending on the degree of demand uncertainty and level
of product modularization. This insightful linkage invites the development of an
entirely new body of postponement research.
For example, Lee (2002) uses the interaction between demand uncertainty and
supply uncertainty to suggest the existence of four distinct types of supply chains.
 As shown in Figure 2, each supply chain type deals with different forms and degrees of Progress of
supply and demand uncertainty. postponement
By combining these general supply chain descriptions and our expanded
understanding of postponement, future researchers can begin to reveal new research
opportunities to apply postponement. Instead of generalizing postponement as
simply a strategy for innovative products, opportunities within different types of
supply chains can be investigated. A matrix similar to the one shown in Table IV, 605
could prove useful in revealing these opportunities.
As shown in Table IV, we provide a starting point for matching postponement
strategies with the four types of uncertainty supply chain profiles proposed by Lee
(2002). Each of the four supply chain profiles and postponement are discussed in the
following paragraphs.
Efficient supply chains are characterized by low supply and demand uncertainty
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(Lee, 2002). As shown in Table IV, we question the use of postponement in this
situation. Postponement is often found where uncertainty exists such as supply chains
that involve innovative products. For examples, past literature provides examples of
opportunities for product postponement (Brown et al., 2000) and production
postponement (Feitzinger and Lee, 1997) when the supply chain revolves around an
innovative product. However, what opportunities exist for postponement within

Low Demand High Demand

Uncertainty Uncertainty
Low Supply
Uncertainty
Efficient Supply Responsive
Chains Supply Chains

Risk-hedging Agile Supply

Supply Chains Chains Figure 2.
High Supply
Uncertainty Supply and demand
uncertainty matrix
Source: Lee (2002)

Product
design Purchasing Production Logistics Price Product
postponement postponement postponement postponement postponement postponement

Efficient
supply
chains ? ? ? ? ? ?
Risk-hedging
supply
chains X X
Responsive
supply Table IV.
chains X X X X X Matching supply chains
Agile supply with postponement
chains X X X X X X strategies
 IJPDLM supply chains involving functional products? For example, could logistics
37,8 postponement serve as a means for creating cost efficiencies in an efficient supply
chain?
Risk hedging supply chains are those characterized by low demand and
high-supply uncertainty (Lee, 2002). We have provided a starting point for matching
appropriate postponement strategies in Table IV. We list a few research questions that
606 could be investigated relative to the matching in this table. What are the effective
means of utilizing purchasing postponement when there is a high uncertainty of
supply? This question could be viewed in light of various factors such as uncertainty of
price, supplier performance, and supply availability. Could logistics postponement
provide the pooling and sharing needed to combat supply disruptions in a risk-hedging
supply chain? The overarching question here is how can upstream activities be
postponed in light of supply uncertainty? Equally important, is when should upstream
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activities not be postponed with high-supply uncertainty?

Responsive supply chains are characterized by high demand and low-supply
uncertainty. Again, we have provided a starting point for matching appropriate
postponement strategies in Table IV. Most of the postponement strategies are more
demand side focused and thus have a high likelihood of fitting with this type of supply
chain. However, an important dissection of demand uncertainty is needed. Demand
may vary along various dimensions such as quantity, price, product mix and timing.
Future research needs to focus on which dimensions are uncertain and which
postponement strategies are the most effective. This would allow the research to
become more prescriptive in nature.
Agile supply chains are high on both supply and demand uncertainty (Lee, 2002).
As shown in Table IV, all postponement strategies would appear to be appropriate in
this situation. The problem then becomes which is the most appropriate or what
combinations are the most effective. Additionally, the question arises as to how does
a company manage a portfolio of postponement strategies to create this agile supply
chain? Future investigation is needed in this area. Future research that could provide
prescriptive information in this situation would be particularly beneficial.

New challenge 5: investigate postponement implementation

With the rapidly expanding definition and growing body of academic research, one
would expect to see a similar widespread implementation of postponement among
practitioners. However, a recurring theme amongst the literature reviewed was that the
application of postponement was not as widespread as expected (Battezzati and
Magnani, 2000; Bowersox et al., 1999; Yang et al., 2004a). To date, Yang et al. (2005a)
and Graman and Magazine (2006) provide the only empirical research addressing the
application postponement in industry.
When explaining why supply chain strategies and technologies had not led to the
expected improvements in performance, Fisher (1997) suggested it was because
managers lack a framework for deciding which strategies are best for their particular
companys situations. Is this the case for postponement? If so, we hope this effort will
serve as the foundation for future efforts that lead to the development of such a
framework.
However, we suspect that the lag in postponement adoption is not due simply to the
lack of a framework, but is also the result of multiple additional factors. Innovation
 diffusion theory provides a useful theoretical lens through which to view this issue. Progress of
Rogers (2003) suggests that individuals, when first introduced to an innovation such as postponement
postponement, develop perceptions about the innovation and that these perceptions
help to explain its rate of adoption. Rogers (2203) describes the main innovation research
characteristics to be relative advantage, compatibility, complexity and trialability. We
believe that postponement could be fully explored through the lens of these concepts
we provide a few research questions that could be investigated. How do these 607
characteristics relate to postponement? How do these characteristics vary among
different industries considering postponement? How do these characteristics vary
amongst the different forms of postponement? Postponement research investigating
these relationships should provide needed insight into the adoption of postponement.

Limitations
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Our review included 46 postponement research efforts published between 1999 and
2006. While efforts were made to be all-inclusive, relevant research efforts may have
inadvertently been omitted. However, we believe this review is an accurate
representation of the body of postponement research published during the specified
timeframe and therefore feel that confidence may be placed on the resulting
assessments.

Closing remarks
Once viewed as a limited supply chain strategy, postponement is in the midst of a
resurgence of interest. Practitioners and researchers alike are now beginning to view
postponement as a potential tool for reconfiguring the entire supply chain.
The objective of this paper was to use the challenges of past research as a measure
of the progress of postponement. Our review revealed a significant increase in the
number of postponement research efforts, many of which at least partially addressed
past challenges. We identified several opportunities to continue addressing these past
challenges and present new challenges for future researchers.
When concluding his review, Van Hoek (2001) intentionally omitted the term
conclusion. Instead, he opted for closing remarks, suggesting that postponement
researchers were not yet in a position to make conclusions. Based on our review, we
concur and also opted for closing remarks. Our hope is that our work, like Van Hoeks,
will serve as a foundation for and measure of future postponement research efforts.

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Further reading
Er, M. and MacCarthy, B. (2006), Managing product variety in multinational corporation supply
chains, Journal of Manufacturing Technology Management, Vol. 17 No. 8, pp. 1117-38.
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management practices on competitive advantage and organizational performance,
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Wadhwa, S., Bhoon, K.S. and Chan, F.T.S. (2006), Postponement strategies through business
process redesign in automotive manufacturing, Industrial Management & Data Systems,
Vol. 106 No. 3, pp. 307-26.

About the authors

Christopher A. Boone received his PhD from Auburn University. His research interests include
supply chain strategy, service parts inventory management, and supply chain technology. He
has had research appear in International Journal of Integrated Supply Management and
conference proceedings. Additionally, he has several manuscripts under development for journal
submission. He remains an active duty member of the US Air Force, where he has conducted
numerous studies aimed at improving peacetime and wartime logistical support. He earned his
MS in Logistics Management from the Air Force Institute of Technology, Dayton, Ohio, and a
BBA from Faulkner University in Montgomery, Alabama. E-mail: booneca@auburn.edu
Christopher W. Craighead is an Associate Professor of Supply Chain Management at Auburn
University. His primary research interest is in the area of purchasing/sourcing/supply
management with specific interests in supply risk/disruptions, strategic global sourcing/supply
management, service supply management, and technology-enabled supply network integration.
Craighead has articles published in Journal of Operations Management, Production and
Operations Management, Decision Sciences, European Journal of Operational Research,
 International Journal of Production Research, OMEGA: The International Journal of Progress of
Management Science, Supply Chain Management Review, International Journal of Logistics
Management, Business Horizons, Communications of the ACM, DATA BASE for Advances in postponement
Information Systems, and other journals. He has been the recipient of several research research
fellowships, competitive research grants, and research awards. For examples, he was co-author
on a paper that won the Wickham Skinner Best Paper Award given by the Production and
Operations Management Society (POMS) and he won the 2006 Outstanding Research Award for
the College of Business at Auburn University. He serves as an Associate Editor of the Journal of 611
Operations, an Area Editor for Operations Management Research and also serves on the
Editorial Review Boards of Decision Sciences and Production and Operations Management.
E-mail: craigcw@auburn.edu
Joe B. Hanna (PhD, New Mexico State University) currently serves as Departmental
Chairperson and Professor of Supply Chain Management in the College of Business at Auburn
University. He has authored or co-authored numerous journal articles and a logistics textbook
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and has participated in government funded transportation research. He is also an active member
of several professional organizations and regularly conducts professional training seminars for
various organizations. His area of interest in supply chain management allows him to instruct
undergraduate, graduate, and executive education students at Auburn University. Prior to
entering academia, He gained professional experience working for Phillips Petroleum Company,
Phillips 66 Chemical Company, and Coopers and Lybrand. Joe B. Hanna is the corresponding
author and can be contacted at: hannajb@auburn.edu

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